Lockheed, Telespazio, TRW Unite On Global Wireless Provider

NEW YORK: Lockheed Martin Global Telecommunications, TRW Inc. and Telespazio, which is part of Telecom Italia, announced May 6 a strategic venture to form Astrolink, the world's first global, on-demand, wireless broadband service provider. Astrolink has received $900 million in equity from the three partners. The venture is said to be worth a total of $3.6 billion. "Lockheed Martin will have an initial ownership of 46% in the satellite venture, and both Telespazio and TRW will own 27% each," said president and CEO Celso Azevedo at a meeting in New York Lockheed Martin is investing $400 million in Astrolink; Telespazio is investing $250 million; and TRW is putting in $250 million. Astrolink has begun construction of the broadband service system, scheduled to begin service in 2003, company officials said. The company will focus on the high-growth area of broadband data services: carrying traffic for Internet, intranet, multimedia, and corporate data networks. Customers will be able to install small satellite dishes at businesses and homes to quickly and inexpensively connect to high-speed networks," says Azevedo, adding that customers will only be charged a meager amount for bandwidth access. Under the agreement, Lockheed Martin will provide Astrolink with spacecraft, systems integration, and launch services; Lockheed Martin Global Telecommunications will act as a service provider. Telespazio will supply worldwide ground systems for the venture, along with managing overall satellite and network control systems during the operational phase. Telecom Italia will market Astrolink services in Italy and rest of Europe, and TRW will build the digital communications payloads for the satellite and also be a service provider. Astrolink plans to launch up to nine satellites to be placed in five orbital positions, according to market demand. The first satellite is scheduled for launch in 2002 and will provide services to customers in Europe and America. This will put Astrolink on track to offer services in 2003. "Each beam will cover 400 miles and 600 kilometers in diameter," Azevedo says. "And we have the ability to point the beam at a market which gives us more revenue." For Lockheed Martin CEO John Sponyoe, this venture is also a strategic shift to bite into the booming e-commerce business. "Virtually overnight we have entered the e-commerce era. The demand for e-commerce is worldwide, and the choice is either to lead or to follow," Sponyoe says. "We chose to lead." Sponyoe says Lockheed Martin Global Telecommunications was the company's initial entry into the communications business and "the acquisition of Comsat the other." Sponyoe says he expects to close the $2.7 billion Comsat acquisition soon. Astrolink is also in negotiations with additional prospective partners, including service providers, information systems companies, and third-party application developers, to help the distribution of satellite services. "We'll be focusing on large and regional enterprises initially before moving on to the consumer market," Azevedo says.